The EIU view

The administration of the president, Moon Jae-in, is pursuing an ambitious demand-driven economic growth agenda through increased government spending and redistributive policies. Real GDP growth will average 2.9% a year in 2019-23. North Korea's complete denuclearisation remains unlikely and South Korea's security alliance with the US will remain strong. However, Moon Jae-in will keep pushing for re-engagement with the North.

Japan/South Korea: Moon-Abe meeting
The two leaders discussed North Korea in New York, but the issue of "comfort women" remained a thorny topic and it will continue to dominate the two countries' diplomatic ties.

Longer wait for constitutional reform
Pressure will mount for the Liberty Korea Party to vote for the constitutional reform focusing on the presidency, but economic issues are likely to take priority in parliament.

A longer wait for the next interest-rate rise
A new, 25-basis-point increase is likely to take place later rather than sooner in the second half of 2018. The central bank will continue to prioritise domestic economic conditions.